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When you deposit money in your bank account, it doesn’t just sit there—the bank uses it to finance new businesses and projects, and at most banks, a significant chunk of the money goes to fossil fuels. JP Morgan Chase, for example, put an estimated $434 billion into fossil fuel projects over the past six years.
A new report from the nonprofit Project Drawdown estimates that for every $1,000 you have in an account at a big bank in the U.S., the carbon footprint is around 0.24 metric tons each year, or roughly equivalent to the emissions from flying from New York to Seattle. At the four largest banks—Chase, Bank of America, Citigroup, and Wells Fargo—the footprint is higher, at 0.29 metric tons of CO2.
Switching to what the report calls a “climate-responsible” bank, or one that doesn’t lend to fossil fuel projects, could have more benefit for the climate than switching to an all-vegan diet. That’s not to say you shouldn’t also eat less meat, but what you do with your money matters.
“We wanted to look at different leverage points we have to bring climate solutions into the world, and move away from the industries of the past to the industries of the future,” says Jamie Alexander, director of Drawdown Labs, a program at Project Drawdown that focuses on scaling up climate action in the private sector. “And money is a big part of that.”
If you want change banks, here are a few steps to take.
Calculate your “financed” emissions
Banks don’t transparently share the details of their emissions from financing. But if you bank with one of the largest 11 banks in the U.S., the report suggests using the rough estimate of 0.24 metric tons of CO2 for every $1,000 you have in the bank. Between 20% and 30% of your money is likely used in fossil fuel projects or other carbon-intensive sectors like mining.
If you have time, dig a little deeper
For extra credit, look into your bank’s policies on climate. Do they have a commitment to stop funding fossil fuels? Do they have a commitment to reach net zero that includes emissions from financing? Do they have a plan to get there, including short-term goals? Have they committed a specific amount to fund climate solutions?
Call your bank and tell them why you want to leave
Call your bank’s customer service number and tell them that you’re thinking about changing banks. While you could just make the switch, explicitly explaining why can help pressure banks to change their policies. “Engaging the large banks is critical, because we will need them and we need trillions of dollars in climate finance each year to avoid the worst impacts of climate change,” says Alexander. “So we’re going to need the infrastructure and the capacity of those big banks in some way.”
When Alexander called her own bank, she explained that she was considering moving to a climate-friendly bank, and asked about its climate policies. She was passed between multiple customer service representatives until she got to someone who could talk about the issue. “I think I got passed on maybe four times in the conversation,” she says. “Then I said I was going to take that information and do some research. A few weeks later, I called back and said that I had decided to move my money and I referenced that earlier conversation.”
Find a better bank
A tool called Bank for Good can help you find a bank or credit union with a fossil-free commitment. Good alternatives do exist, though if you want to be able to go to a local branch rather than banking online, that can be harder in some locations. Bank.Green, another tool, lets you search for some basic information about your current bank’s emissions as well as helping you find a new bank. When you make the switch, Alexander recommends telling the new bank that their climate policies were the deciding factor.
Consider pushing your company to change its own banking
Where companies store their money also matters. A report last year found that for some large corporations, the carbon footprint from their investments and cash in banks can be their largest source of emissions; for PayPal, for example, its carbon footprint from banking in 2021 was 55 times larger than all of its other emissions combined. Consider forming a group of coworkers to push your employer to move to different banks. (Some companies have done this with a portion of their cash, like Apple, which moved some money to credit unions last year.)
The financial system can seem abstract and unwieldy and like something that an individual can’t influence. But if a large enough group of customers make it clear why they’re leaving, banks will notice. “I hope that this report helps people feel like they can intervene in these systems,” Alexander says. “We don’t have to be passive observers to what is done with our hard-earned money.”
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